LAGUNA HILLS, Calif. (BRAIN) — Do you rent bikes? Is there a high demand for rentals in your market?
The newest issue of Bicycle Retailer & Industry News asks those questions in the regular State of Retail column. Below is the full answer from one of BRAIN's State of Retail panelists, Park Chambers, from Portland, Oregon's Fat Tire Farm. To see more responses, check out April 1 issue of BRAIN, which is arriving in mailboxes this week. If you'd like to weigh in, please leave your thoughts in the comments section below. And look for the next question on the web on April 15.
To learn more about the panelists, see our 2017 State of Retail panel bio page.
We have a rental/demo center. Rentals/demos go towards the purchase with some limitations, i.e., you can't rent to own. The difference between the rental and demo is minor and it's in the customers mind. Demos are for someone who wants to buy. Rentals are for someone looking to go for a ride. Although our industry conditions people that demo is free, I feel that it should charge to give value for what it does and donate that fee to the local trail association. We donate $5 from each rental to the area trail stewards.
A high performance bike for some might be $2,500 and for others it might be $7,000. We rent and/or demo both and many in between. We do charge all customers to try the bikes. It's a free ride if you buy from us and if not we've covered the wear and tear on the bike and given the customer confidence in a buying decision. I wouldn't call it a huge profit center but much more a customer service experience. We have one of the largest most diverse fleet in the Northwest, with Ibis, Yeti, Santa Cruz and Rocky Mountain to name a few. We also try brands such as Pivot and Giant in the fleet to see how they track. It's a good indicator to see what customers want, but if you only have one or two brands it's not a great indicator.
Our 21st Avenue store did rentals until Portland brought in a bike share program. We found that the rental market for city bikes died overnight.
The real challenge is the cost of the bikes and terms. We work our best with manufacturers but it's still a huge cost for a fleet. By the time we sell most of the bikes in the fall the manufacturers have changed the model year and closed out some of the models, killing the sale value. We try our best to manage that timeframe as to get the most value from the fleet.
